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Housing Search Frictions: Evidence from Detailed Search Data and a Field Experiment

Author

Listed:
  • Bergman, Peter

    (University of Texas at Austin)

  • Chan, Eric

    (Columbia University)

  • Kapor, Adam

    (Princeton University)

Abstract
This paper shows that imperfect information about school quality causes low-income families to live in neighborhoods with lower-performing, more segregated schools. We randomized the addition of school quality information onto a nationwide website of housing listings for families with housing vouchers. We find that this information causes families to choose neighborhoods with schools that have 1.5 percentage point higher proficiency rate on state exams. We use data from the experiment to estimate a dynamic model of families' search for housing on and off the website, as well as their location decisions. The model incorporates imperfect information about school quality and characterizes the bias that would arise from estimating neighborhood preferences ignoring this information problem. Having data from both the treatment and control groups allows us to estimate families' prior beliefs about school quality and each group's apparent valuation of school quality. Families tend to underestimate school quality conditional on neighborhood characteristics. If we had ignored imperfect information, we would have estimated that the control group valued school quality relative to their commute downtown by less than half that of the treatment group.

Suggested Citation

  • Bergman, Peter & Chan, Eric & Kapor, Adam, 2020. "Housing Search Frictions: Evidence from Detailed Search Data and a Field Experiment," IZA Discussion Papers 13006, Institute of Labor Economics (IZA).
    • Handle: RePEc:iza:izadps:dp13006
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    References listed on IDEAS

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    Cited by:

    1. Fernando V. Ferreira & Maisy Wong, 2022. "Neighborhood Choice After COVID: The Role of Rents, Amenities, and Work-From-Home," NBER Working Papers 29960, National Bureau of Economic Research, Inc.
    2. Dionissi Aliprantis & Hal Martin & Kristen Tauber, 2020. "What Determines the Success of Housing Mobility Programs?," Working Papers 20-36R, Federal Reserve Bank of Cleveland, revised 19 Oct 2022.
    3. Patrick Kline & Evan K. Rose & Christopher R. Walters, 2024. "A Discrimination Report Card," American Economic Review, American Economic Association, vol. 114(8), pages 2472-2525, August.
    4. Aliprantis, Dionissi & Martin, Hal & Phillips, David, 2022. "Landlords and access to opportunity," Journal of Urban Economics, Elsevier, vol. 129(C).
    5. Chan, Eric W. & Fan, Yulian, 2023. "Housing discrimination in the low-income context: Evidence from a correspondence experiment," Journal of Housing Economics, Elsevier, vol. 59(PA).
    6. Mikhail Golosov & Michael Graber & Magne Mogstad & David Novgorodsky, 2024. "How Americans Respond to Idiosyncratic and Exogenous Changes in Household Wealth and Unearned Income," The Quarterly Journal of Economics, President and Fellows of Harvard College, vol. 139(2), pages 1321-1395.
    7. Robert Ainsworth & Rajeev Dehejia & Cristian Pop-Eleches & Miguel Urquiola, 2020. "Information, Preferences, and Household Demand for School Value Added," NBER Working Papers 28267, National Bureau of Economic Research, Inc.
    8. Fan, Ying & Fu, Yuqi & Yang, Zan & Chen, Ming, 2024. "Search frictions in rental markets: Evidence from urban China," China Economic Review, Elsevier, vol. 83(C).
    9. Jiarui Liu, 2021. "Sequential Search Models: A Pairwise Maximum Rank Approach," Papers 2104.13865, arXiv.org, revised Nov 2021.
    10. Fan, Ying & Fu, Yuqi & Yang, Zan & Chen, Ming, 2023. "Search Frictions in Rental Markets: Evidence from Urban China," Working Paper Series 23/11, Royal Institute of Technology, Department of Real Estate and Construction Management & Banking and Finance.

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    More about this item

    Keywords

    housing; education; information; experiment; choice;
    All these keywords.

    JEL classification:

    • I24 - Health, Education, and Welfare - - Education - - - Education and Inequality

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